Today, the US will apply sanctions on Russia in retaliation to an American investigation concluding that Moscow used a chemical

Photo: Reuters/Peter Nicholls

Today, the US will apply sanctions on Russia in retaliation to an American investigation concluding that Moscow used a chemical agent on former Russian intelligence officer Sergei Skripal.

The sanctions prohibit transactions supporting Russian energy and construction projects, as well as those between US entities and Russian politicians and oligarchs. American firms will also not be allowed to sell any national security-related goods to Russia like gas turbines, integrated circuits, testing and calibration equipment. Following the announcement, the Russian ruble fell 3% to its lowest level since November 2016 on Wednesday leading the Russian Central Bank to buy less foreign currency.

Washington also announced that it will apply more comprehensive sanctions in 90 days, including freezing Russian banks’ use of the US dollar. Russian Prime Minister Dmitry Medvedev has described such a move as a “declaration of economic war”. In response, Russia hinted they would explore military options, possibly a cyberattack against American infrastructure.

Expect today’s sanctions to have little impact on Russia’s economy. The US may re-consider freezing Russia’s use of the dollar. In the long-term, the tension in the Russian-American relationship may return to Cold War levels.

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